Blogged

May 18, 2008

Katrina Contractor Indicted

by Deb Cupples | It's the only case of criminal wrongdoing that the Justice Department has prosecuted so far relating to New Orleans levee work. I wonder why. Given the confluence of motives and opportunity, surely the rebuilding of levees in New Orleans is rife with illegal acts. The Associated Press reports:

"Durwanda Elizabeth Morgan Heinrich, a dirt, sand and gravel subcontractor, was accused of conspiring with two former corps workers to get confidential bid information for a $16.8 million levee project southwest of New Orleans in September 2006."

"In exchange, the indictment said, Heinrich promised to give the
workers, Kern Carver Bernard Wilson and Raul Miranda, 25 cents for
every cubic yard of material used to build levees near Lake Cataouatche.

"The arrangement would have funneled $299,375 each to Wilson and Miranda, the Justice Department said.

"Heinrich was charged by a federal grand jury in New Orleans with one
count of conspiring to commit bribery and two counts of offering a
bribe to a public official....

"Miranda, who pleaded guilty in September to bribery, was a construction
manager for Integrated Logistical Support Inc., a New Orleans civil
engineering firm hired to help the corps manage some of its projects." (AP)

Mr. Wilson has also been charged.

Naturally, this story is a reminder of other abuses (or crimes) stemming from the post-Hurricane Katrina rebuilding of the Gulf states. Remember when FEMA rushed to buy 150,000 trailers via no-bid contracts to house Hurricane Katrina victims? Many of those trailers were uninhabitable: some were tainted with formaldehyde.

As far as I know, the federal government has not sued the contractor for a refund. Instead, FEMA sold off about 11,000 of those trailers at 40 cents on the dollar from July 2006 - July 2007. This January, we learned that FEMA has offered to buy back those trailers at full price.

My point: some contractors have abused (if not robbed) us taxpayers -- and some government employees seemed to help them do it.

- FEMA mis-spent $16 million by engaging in rigged bids for contractors

- FEMA didn't bother overseeing contractors to prevent waste or fraud

It seems logical that at least some of those contractors who got rigged bids (i.e., got to name their own price) might have given some inducement to FEMA staff in order to get contracts.

In 2006, the House Oversight Committee produced a report stating that 19 contracts worth $9 billion were "plagued by waste, fraud, abuse or mismangement." Some examples from the report:

- FEMA paid $3 million for 4,000 "camp beds" that were never used

- Employees used FEMA credit cards for odd purchases like:

* $8,000 for a 63-inch plasma TV

* $63,000 for 20,000 pairs of dog booties

* $??? for 20 boats at twice retail price, only 8 are in FEMA's records.

Incompetence just doesn't seem a plausible explanation. Once again, the fact is that some people (working as contractors) wanted to take more from us taxpayers than they were not willing to actually earn, and some folks in in the federal government opened the cookie jar's lid (and turned a blind eye).